Detention Order Passed After 7 Days of Issuance of Notice Under Section 129(3)--Validity of
CA. Satyadev Purohit
The learned author seeks to make an analytical study of the issue as to whether detention order passed under section 129 after expiry of seven days from the date of issuance of notice, is sustainable in law. The discussion is based on the relevant statutory provisions under the Central Goods and Services Tax Act, 2017 and rules made there under and a recent Madras High Court decision in the case of D.K. Enterprises v. The Assistant/Deputy Commissioner (ST), decided on 29-8-2022 : 2022 TaxPub(GST) 1386 (Mad-HC).
Section 129 of the Central Goods and Services Tax Act, 2017 (in short "the CGST Act") deals with detention, seizure and release of goods and conveyance in transit.
As per sub-section (1) of section 129, where any person transports any goods or stores any goods while they are in transit in contravention of the provisions of this Act or the rules made thereunder, all such goods and conveyance used as a means of transport for carrying the said goods and documents relating to such goods and conveyance shall be liable to detention or seizure and after detention or seizure, shall be released,--
(a) on payment of penalty equal to two hundred per cent. of the tax payable on such goods and, in case of exempted goods, on payment of an amount equal to two per cent. of the value of goods or twenty-five thousand rupees, whichever is less, where the owner of the goods comes forward for payment of such penalty;
(b) on payment of penalty equal to fifty per cent. of the value of the goods or two hundred per cent. of the tax payable on such goods, whichever is higher, and in case of exempted goods, on payment of an amount equal to five per cent. of the value of goods or twenty-five thousand rupees, whichever is less, where the owner of the goods does not come forward for payment of such penalty;
(c) upon furnishing a security equivalent to the amount payable under clause (a) or clause (b) in such form and manner as may be prescribed: